Jan. 18 (Bloomberg) -- Water utilities are reviewing safety
plans after a chemical spill tainted a West Virginia treatment
plant that hadn’t updated its assessment in 12 years, before a
company began storing coal-cleansing chemicals nearby.

The 2002 Source Water Assessment Report for the West
Virginia American Water Co. plant in Charleston listed the risk
as high from industrial sites along the Elk River. There’s no
sign it was updated to account for Freedom Industries Inc.,
which bought and converted a facility that had stored gasoline
into a site for storing the coal-cleaning chemical that leaked
Jan. 9, forcing 300,000 people to stop using their water.

Critics said the document shows the limits of laws meant to
keep U.S. drinking water safe. The American Water Works
Association, which represents the industry, said utilities will
take a new look at their plans after the spill in West Virginia.

“Utilities across the country are looking again at their
water assessment,” Tom Curtis, head of government affairs at
the Denver-based association, said in an interview. They’re
asking, “What’s in the watershed and what do I need to be aware
of?”

In addition, regulators and lawmakers may learn more about
the regulation for factories, storage facilities or farmers,
said Curtis, whose group represents water utilities and
manufacturers.

Senate Bill

West Virginia’s two Democratic U.S. senators, Joe Manchin
and Jay Rockefeller, yesterday proposed legislation to boost
inspections of above-ground chemical storage facilities and
require companies to develop state-approved emergency-response
plans. Their bill won backing from Senator Barbara Boxer, the
California Democrat and chairman of the Environment and Public
Works Committee.

West Virginia Governor Earl Ray Tomblin also said that he
will push for a state measure to require that public water
systems have “proper contingency plans in place.” His office
will propose that in a bill to the legislature next week, he
said in a statement yesterday.

Environmental groups cite the leak of 7,500 gallons of a
coal-processing chemical from a Freedom Industries tank on the
banks of the Elk River, less than 2 miles miles upstream from a
water intake serving the state capital, to show that protections
are lacking for drinking water.

The leak of 4-methylcyclohexane methanol caused the largest
do-not-use order ever by the West Virginia water utility,
covering 300,000 people in the capital and nine nearby counties.

System Flushed

After days of flushing the system, the entire area was
cleared yesterday to resume use of the water, with an exemption
for a few towns and an advisory that pregnant women avoid
drinking it.

Rockefeller yesterday asked West Virginia American Water
for information on tests that led to the lifting of the ban.

“While there are a number of questions I have about the
spill and your company’s response to it, many of my constituents
have expressed concern that the levels of” the chemical “have
spiked in certain areas despite the ‘do not use’ order being
lifted,” Rockefeller said in a letter to the company’s
president, Jeffrey McIntyre.

The senator asked McIntyre whether the company’s tests show
levels of the chemical are rising, what steps are being taken to
protect the public and the actions to further eliminate the
chemical.

Freedom Industries separately filed for bankruptcy
protection, after more than two dozen lawsuits were filed
against the company. Lawyers have also been filed against West
Virginia American Water, part of American Water Works Co., the
nation’s biggest publicly traded water utility.

Assess Risks

American Water, based in Voorhees, New Jersey, works with
local, state and federal agencies to assess risks to water
quality, said Denise Free, a company spokeswoman.

“American Water continuously coordinates with responsible
state and federal agencies and participates or leads many joint
industry and government research projects and working groups to
review and recommend ongoing improvements to the water sector,”
she said in an e-mail when asked about the West Virginia report.

The assessment for the Elk River, required by a 1996
drinking water law, was prepared by the West Virginia health
department. It says the risk of contamination in the river is
high, and recommends that efforts be made to collect information
about possible pollution risks.

“Source water protection efforts should be directed toward
the establishment of an effective and efficient emergency
response plan if one does not currently exist,” according to
the assessment.

Current Rules

The West Virginia case shows limits of current rules, which
mandate that utilities or localities assess their risks without
giving them the power or requiring the deficiencies be remedied,
said Erik Olson, a lawyer focusing on drinking water at the
Natural Resources Defense Council, the New York-based
environmental advocacy group.

“It’s pretty clear that a lot of problems were identified,
but it’s not clear that anything was done about it,” he said in
an interview. “We’re hoping this is a wake-up call to
regulators and Congress.”